Labor floats Nauru solution as Angus Houston hands down report

SENIOR Labor figures are exploring a shift on asylum-seeker policy to reopen the Nauru processing centre as part of a proposal that could trigger the Malaysia Solution.

SENIOR Labor figures are exploring a dramatic shift on asylum-seeker policy to reopen the Nauru processing centre as part of a two-stage proposal that could trigger the government's Malaysia Solution if the first step does not stop boat arrivals.

The plan is being considered as a rapid response to a border protection review due today from former Australian Defence Force chief Angus Houston, heightening pressure on both major parties to negotiate a compromise as parliament resumes after the winter break. As three asylum-seeker boats arrived over the weekend, Immigration Minister Chris Bowen left room to strike a deal with Coalition migration spokesman Scott Morrison, who said he was willing to consider the proposals in the Houston report. The report will be handed to the government early this morning ahead of meetings of cabinet and caucus.

Labor insiders believe that the government must get an effective policy in place to curb boat arrivals and get the issue off the political agenda, even if that means backing down on the party's long objections to an offshore processing centre on the Pacific island of Nauru.

Although the two-stage strategy risks a backlash from the Labor Left - and has not been fully discussed within government - it is seen by some as a way to broker an agreement following the resumption of federal parliament tomorrow.

"There is no point seeking independent expert advice if you don't intend to follow it," a government source said. "Subject to seeing the report, I tend to think that whatever it recommends should be legislated without delay."

Mr Bowen left room yesterday to modify government policy to embrace the new report. "Let's look at the expert panel's recommendation. Obviously then we'd enter into discussions with other parties in the parliament if they're willing to have them," he told the ABC's Insiders program.

While ministers are waiting to see the report, government sources insist all options must be on the table even if that includes reversing Labor's objections to temporary protection visas if the Houston report recommends them. The Rudd government dropped the use of TPVs, attacking them as a "punitive" part of the Howard government's border regime, but some within the government are preparing to consider them depending on Air Chief Marshal Houston's findings.

Unlike the reintroduction of offshore processing, restoring TPVs would not require legislation.

The government has been desperate for a deterrent to the arrival of boatpeople since August last year, when the High Court rejected its proposal to send 800 asylum-seekers for processing in Malaysia in return for taking 4000 identified refugees.

With the opposition and the Greens refusing to back legislation that would allow the Malaysia Solution to go ahead, Julia Gillard in late June commissioned Air Chief Marshal Houston, refugee advocate Paris Aristotle and former senior bureaucrat Michael L'Estrange to deliver a report on options for solving the issue.

Coalition border protection spokesman Michael Keenan said yesterday an average of one boat a day had arrived off Australia's north since the panel was formed.

With the rate of arrivals building to what appeared to be a last-minute flood on the eve of the delivery of the Houston report, Navy and Customs vessels have intercepted seven boats over the past five days. The most recent arrivals included a vessel intercepted by HMAS Broome northwest of Ashmore Islands on Saturday night with about 87 passengers on board.

In opposition, Labor consistently opposed Nauru as an offshore processing centre because the tiny nation was not a signatory to the UN Convention on Refugees. There were also reports of adverse mental health impacts on detainees, doubts about its effectiveness as a deterrent and the party's support for onshore processing.

But given the policy stalemate forced by the High Court's decision, parliament's failure to support the Malaysia Solution and the steep increase in boat arrivals, the government sources say the only likely prospect for achieving a legislated policy that could win the opposition's support, and stop arrivals, is to reopen Nauru and reintroduce TPVs.

Mr Bowen reportedly proposed to cabinet that Nauru be reopened after the High Court decision struck down the Malaysia people-swap agreement but he was overruled.

Sources suggest it is likely that legislation could be introduced to parliament this week, adopting the Houston report's recommendations, or at least a variation on them. The government is confident that the Greens' policy opposing any form of offshore processing will not be supported by the Houston report.

The new proposal inside Labor would not attach the Malaysia deal directly to legislation to re-open Nauru. But the aim would be to win the opposition's support, which would be needed for the bill to pass the Senate. If the reopening of Nauru did not stem the flow of boats, Labor's argument for the Malaysia Solution would be stronger.

The two sides differ radically in their views of how much Nauru would cost. The Coalition says that if it wins government it will re-establish an offshore processing centre on the island nation with 1350 beds at a capital cost $95 million, with an estimated annual maximum operational cost, at full capacity, of $202.5m.

The government says it will cost $2 billion to re-establish and operate a processing centre on Nauru for 750 people. That includes $316m in capital costs.

The Coalition has rejected those estimates.

The Australian has been told that the Houston panel, and a group of MPs, had comprehensive discussions with senior naval officers about the practicalities of the Coalition's policy of turning boats back to Indonesia.

It is understood that the officers repeated the message delivered by navy chief Ray Griggs during a Senate estimates committee hearing last year that turning back boats was possible but potentially dangerous for both the navy crew members involved and the asylum-seekers.

Mr Morrison told The Australian yesterday the Houston panel was set up by the government and it would report to the government. He said when the government announced its next step, the Coalition would consider whether to support it. He said that if the government put up the same legislation already rejected by parliament, the Coalition would reject it.

"If it is something other than that we'd look at it in the usual way," Mr Morrison said. "That could include the Coalition's bill already on the notice paper."

The Coalition supports the reopening of Nauru and the reintroduction of TPVs, arguing they stopped the boats during the Howard government, but has baulked at the Malaysia Solution.

Mr Morrison said the government could make major changes to its policies without taking legislation to parliament. It could, for instance, issue different orders to the navy to turn boats back to Indonesia. Or the government could tell captains of naval vessels involved in rescues in Indonesian waters to take the people they picked up to Indonesia, as was international practice, rather than bring them to Christmas Island.

The government could also issue TPVs by using the Government Gazette to add a new visa category.